briefing papers on scottish independence
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1
Response to the Scottish Government consultation on Non-Domestic Rates
Scotland’s Future
Scotland’S Future
On 18 September 2014 the people of Scotland will vote on the constitutional future of Scotland, voters will be asked the question: Should Scotland become an independent country?
This will be the most important decision the people of Scotland will make for 300 years, and each person will come to a view about how to vote based on the information provided between now and September. But whatever the outcome of the referendum, the key challenges facing Scottish businesses will remain.
Your chamber’S approach
Aberdeen & Grampian Chamber of Commerce is North-east Scotland’s leading private sector, member-focused, business organisation. The Chamber represents more than 1,250 businesses with almost 130,000 employees in the private sector covering all industry sectors, ranging in size from sole traders to multi-national corporations. The Chamber wishes to play a constructive and mature role in the constitutional debate and as such, will remain impartial and apolitical as the debate moves forward.
We will be looking to support members so that they can become as informed as possible about the likely outcomes in the event of a Yes or No vote. This will take the form of “filling in the gaps” where there is a lack of clear information, and cataloguing and summarising the evidence published by the respective campaigns.
This booklet is part of that process. We have endeavoured to read all the information coming from the Yes and No campaigns, the Scottish Government, UK Government, and external agencies on the main issues businesses want more information on. The papers summarise the potential outcomes facing Scotland in the event of a Yes or No vote, each campaign’s preferred outcome, and our analysis of the likely end result.
As you will see, there are still many unknowns, with many of the preferred policy outcomes subject to negotiation or the next political party which forms the next Scottish or UK Government. However, we will continue to hold both campaigns to account and press them to clarify what the final outcome will be.
Rachel ElliottPolicy Executiverachel.elliott@agcc.co.uk
James BreamResearch & Policy Director james.bream@agcc.co.uk
Currency is important Currency policy impacts on
imports and exports through
exchange rates. It also impacts on
government borrowing and
investment; and on monetary
policy
CURRENCY
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, currency was identified by
82% of AGCC’s 159 respondents as an important factor for their business. Two thirds also stated that they
wanted more information to help them understand the current policy direction promoted by the respective
campaigns.
The options available with a ‘yes’ vote
1. Scotland enters into a currency union with the rest
of the UK
2. Scotland continues to use sterling without a formal
agreement with the rest of the UK
3. Scotland sets up its own currency
4. Scotland joins the single European currency
The options available with a ‘no’ vote
1. Sterling continues to be used
2. The UK joins the single European currency
AGCC view of likely end game position
Scotland seeks to use sterling. It is not clear
whether this will involve a currency union.
Some further thoughts and information
The Scottish Government has set up a Fiscal Working Group who have been tasked with overseeing the design of a fiscal framework for an
independent Scotland. It is out of their work that the Scottish Government has come to their favoured position. The UK Government, however,
has stated that Scotland entering into a currency union with the rest of the UK would be subject to negotiations, and would expose both Scotland
and the UK to significant macroeconomic risks. Better Together are of the view that an independent Scotland, if it assumes EU membership,
would be required to join the Euro.
AGCC view of likely end game position
Sterling continues to be used.
The Policy Direction
Option 1 is the favoured option of the Scottish
Government. Yes Scotland campaign do not
appear to have a consistent favoured option for
the currency, this requires more clarity.
The Policy Direction
There does not appear to be a will from the UK
Government or Better Together Campaign to
adopt the Euro.
August 2013 VERSION 1.6
Updated March 2014
Scotland’s Future – Briefing Paper 1
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
17 September 2013 – Research published by the National Institute of Social and Economic Research, assessing choices on currency, concluded
it would be a prudent option to set up a new currency in an independent Scotland. The research highlighted that retaining the pound would limit
how the country could deal with a financial crisis.
26 November 2013 – The Scottish Government White Paper Scotland’s Future states that it is in Scotland’s interests to retain Sterling and
asserts that monetary policy would be set according to economic conditions with ownership and governance of the Bank of England undertaken
on a shareholder basis. They also indicate that it would be open in the future for the people of Scotland to choose a different option.
29 January 2014 – On a visit to Scotland, Bank of England Governor Mark Carney did not endorse or oppose Scottish Independence. In a speech
to the SCDI he outlined that three elements would be essential for a successful currency union; an integrated economy with free movement of
labour, capital and goods, a banking union, and a fiscal pact.
13 February 2014 – The Scotland Analysis paper, Assessment of a sterling currency union, concludes that HM Treasury “would advise the UK
Government against entering into a currency union” due to the lack of evidence that adequate proposals and policy agreements could be secured
to ensure a stable currency union. Launching the paper, Chancellor George Obsorne said there was “no legal reason” why the rest of the UK
would want to share sterling with an independent Scotland. He stated that “if Scotland walks away from the UK, it walks away from the UK pound.”
31 March 2014 – Media reports quote an unnamed UK Government Minister suggesting that a deal could be done which would allow an
independent Scotland to retain the pound. In a joint statement following the reports, George Osborne and Danny Alexander denied this would be
the case.
MEMBERSHIP OF THE EU
In the Scottish Chambers survey conducted between 4 June and 19 June 2013, Scotland’s future status in the EU was identified by 73% of AGCC’s 159 respondents as an important issue for their business. Two thirds of businesses also stated that they wanted more information on this issue to help them understand the current policy direction promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Scotland automatically assumes EU membership, with the
same terms
2. Scotland automatically assumes EU membership, and re-
negotiates terms whilst a member
3. Scotland has to apply to join the EU with the same terms.
All EU states agree to membership
4. Scotland has to apply to join the EU and has to re-
negotiate terms. All EU states agree to membership
5. Scotland has to apply to join the EU, an EU state vetoes
membership
6. Scotland does not join the EU
The options available with a ‘no’ vote
1. The UK remains a full member of the EU
2. The terms of the UK’s membership of the EU is
renegotiated, and a referendum is held based on the
renegotiated settlement
3. A referendum is held in the UK without renegotiation,
which results in the UK remaining in the EU
4. A referendum is held in the UK without renegotiation,
which results in the UK leaving the EU
AGCC view of likely end game position
It is still not clear what outcome a ‘Yes’ vote will
result in. More clarity is required, but this clarity
is unlikely to come in advance of negotiations.
Some further thoughts and information
The Scottish Government has sought legal advice on which outcome an independent Scotland would assume for EU membership,
but to date have refused to make that information public. They have said information on Scotland’s status in the EU will be outlined
in the White Paper to be published in October.
David Cameron has committed to renegotiate the terms of the UK’s membership of the EU, with a view to holding a referendum on
that renegotiated settlement by the end of 2017. It is not yet known what the terms of the renegotiation will be.
AGCC view of likely end game position
A referendum across the UK is held on EU
membership. It is not yet clear what would
happen if options 2 to 4 were the outcome of a
‘No’ vote to independence.
The Policy Direction
It is the view of Yes Scotland, and the Scottish Government,
that Option 2 is the most likely outcome. However, EU
officials have indicated that some EU nations with
secessionist movements are likely to try and block Scotland
becoming a member of the EU.
The Policy Direction
Better Together have highlighted that it is in the UK’s best
interests to remain a EU member. However, Prime
Minister David Cameron has stated that a referendum on
EU membership will take place by the end of 2017 if the
Conservatives win the next election.
AUGUST 2013 VERSION 1.3
Scotland’s Future – Briefing Paper 2
The EU is important As a member of the EU,
Scotland has access to the
free market, which enables
free movement of goods and
people across member states.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
26 November 2013 – The Scottish Government White Paper Scotland’s Future restates their favoured policy that an independent Scotland should
remain a member of the EU. They state that the Scottish situation is sui generis and believes the 18 month period in between a Yes vote and
independence will be a sufficient timescale for agreeing the terms of Scotland’s membership and to complete the necessary procedures. This is a
view supported by Graham Avery, the European Commission's honorary director general
31 January 2014 – The EU Referendum Bill, which would have put into law a 2017 referendum on the UK's membership of the European Union,
failed to pass through the House of Lords within the permitted timescale. Following the fall of the Bill, David Cameron stated that the government
would use every tactic possible to ensure the referendum takes place in 2017.
17 February 2014 – In an interview, EU Commission President Jose Manuel Barroso said it would be “extremely difficult, if not impossible” for
Scotland to gain automatic EU membership. He cited Kosovo as an example of a country which had failed to secure membership as existing members
had vetoed their membership.
Corporation Tax is
important
Corporation taxes have the
potential to encourage or stifle
growth. A stable fiscal regime
supports businesses.
CORPORATION TAX
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, the corporate tax rate was identified by 84% of the 159 AGCC respondents as an important issue for their business. More than 80% of respondents also stated that they wanted more information on this issue to help them understand the current policy direction promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Corporation tax in an independent Scotland
mirrors the UK rate
2. After independence, corporation tax mirrors the
UK for a set period of time before a new rate is set
3. Immediately after independence, Scotland sets a
new corporation tax rate
The options available with a ‘no’ vote
1. Corporation tax falls to 20% in 2015 and
remains at that level
2. Further changes to corporation tax after 2015,
as set by the UK Government
3. Scottish Parliament gains further devolved
powers to amend corporation tax in Scotland
AGCC view of likely end game position
Option 3 – Immediately after independence,
Scotland sets a new corporation tax rate.
Some further thoughts and information
The 2015 reduction in corporation tax will mean that the UK has a lower corporation tax rate than France, Germany and
Luxembourg amongst other European countries. Further changes to the corporation tax rate after 2015, in the event of a No
vote, will depend on the outcome of the next General Election.
The Scotland Act 2012 retains key taxation levers such as corporation tax and capital gains tax as a reserved issue. Any further
proposals for more devolution would have to clarify whether these issues would become devolved.
The Scottish Government has stated its support for a reduction in corporation tax should Scotland gain independence, but the
Better Together campaign have argued that any attempts to reduce the rate would be blocked by Westminster if Scotland was
part of a currency Union with the rest of the UK. Previous modelling by the Scottish Government only explores the economic
benefits delivered by reducing corporation tax to 20%.
AGCC view of likely end game position
Option 2 - Based on previous reduction
announcements, there will be further changes
to corporation tax after 2015.
The Policy Direction
The Scottish Government and Yes campaign
have previously expressed their wish to reduce
corporation tax, and First Minister Alex
Salmond has pledged to undercut the UK rate
by 3%.
The Policy Direction
Since 2011, each Budget has resulted in a
decrease to corporation tax. The Chancellor
announced in the 2013 Budget that corporation
tax would fall to 20% during 2015
AUGUST 2013 VERSION 1.2
Scotland’s Future – Briefing Paper 3
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
19 November 2013 – The Scottish Government paper Economic Policy Choices in an Independent Scotland states that a
reduction in corporation tax could be used to “counterbalance the pull of London and the South East. The papers also highligh ts
that corporation tax could be reduced further for certain types of firms to encourage innovation.
26 November 2013 – The Scottish Government’s White Paper Scotland’s Future confirms that they wouldreduce corporation
tax by up to 3% below the prevailing UK rate. The timetable for introducing this pledge would be published within the first term of
an independent Scottish Parliament.
Business Taxes are
important
Tax paid by businesses pays
for public services and
benefits. A competitive
taxation system encourages
enterprise and growth.
BUSINESS TAXES
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, business taxes were identified by 85% of AGCC’s 159 respondents as an important issue for their business. 75% of respondents also stated that they wanted more information on this issue to help them understand the current policy direction promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Scotland mirrors the taxation system used in the
rest of the UK
2. Scotland mirrors some taxes used in the rest of
the UK and amends others
3. Scotland establishes a separate taxation system
The options available with a ‘no’ vote
1. Provisions in Scotland Act 2012 are
implemented, with no further changes
2. Further tax raising powers are devolved to
Scotland
AGCC view of likely end game position
Not enough information is known at this time to
come to a view.
Some further thoughts and information
While neither the Scottish Government or Yes Scotland campaign have stated their intentions for business taxes in an
independent Scotland, statements in the media indicates that they will not be keen to raise or change business taxation
significantly. Better Together argue that a low tax system and high public spending is unsustainable.
To date, there has been no indication from the Better Together about the future direction of Scotland should it vote against
independence. There has been media speculation that proposals for further devolution will be brought forward, which could have
an impact on future business taxation. However, neither the UK Government or Better Together campaign have brought forward
formal proposals.
AGCC view of likely end game position
Option 1 – Provisions in Scotland Act 2012 are
implemented, with no further changes to
business taxation responsibilities.
The Policy Direction
The Scottish Government paper “Scotland’s
economy – The case for independence” does not
detail how business taxes, apart from corporation
tax, would change in an independent Scotland.
The Policy Direction
Post Scotland Act implementation, Scotland will be
responsible for 16% of the tax raising powers. As
yet, there has been no mention of further
devolution of business taxes.
AUGUST 2013 VERSION 1.2
Scotland’s Future – Briefing Paper 4
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
4 November 2013 – The Scottish Government’s Fiscal Working Group published its Principles for a Modern and Efficient Tax System in an
Independent Scotland. While it makes no recommendations about the levels of business taxation, the report states that the tax system should be
used to encourage economic growth through in the following areas: trade and investment, entrepreneurship, the development of growth sectors
and innovation.
26 November 2013 – The Scottish Government White Paper Scotland’s Future indicates that they would prioritise tax powers to develop growth
sectors and companies. The paper states that following independence the Scottish Government would examine how best to target tax reliefs to
encourage innovative industries. They also plan to simplify the tax system, although no specific details have been provided.
BUSINESS REGULATION
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, business regulation was identified by 58% of AGCC’s 159 respondents as an important issue for their business. Almost 90% of respondents also stated that they wanted more information on this issue to help them understand the current policy direction promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Current UK-wide regulatory organisations continue to
monitor the activities of Scottish businesses
2. Some UK-wide regulatory organisations continue to
monitor Scottish businesses, with some new Scottish
organisations also created
3. Rather than replicating the UK model, a new Scottish
model is created where economic and competition
bodies are combined
The options available with a ‘no’ vote
1. Status quo
2. Further reform to the regulatory environment takes
place
AGCC view of likely end game position
Option 3 – Rather than replicating the UK
model, combined economic and
competition regulatory bodies is created
Some further thoughts and information
The Scottish Government have proposed a combined economic and competition regulator. The use of such a model has been
increasing across Europe, with the Netherlands recently establishing the Authority for Consumer and Markets.
The Scotland Analysis paper Business and Macroeconomic Framework highlights that the regulatory organisations would require
institutional infrastructure, such as public bodies, in order to operate effectively. While the paper recognises that current UK-wide
bodies could support the new regulatory regime in an independent Scotland, this would be subject to negotiation.
AGCC view of likely end game position
Option 2 – Further reform to the regulatory
environment
The Policy Direction
The Scottish Government have proposed a
combined economic and competition regulator
in their paper Economic and Competition
Regulation in an Independent Scotland.
The Policy Direction
Over recent years there has been gradual
merging of economic and regulatory
organisations. The latest to do this is the Office
of Fair Trading and Competition Commission
August 2013 VERSION 1.1
Scotland’s Future – Briefing Paper 5
Business regulation is
important
Businesses want a stable
regulatory environment to do
business safely and fairly, and
without excessive cost
burdens.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
26 November 2013 – The Scottish Government’s White Paper Scotland’s Future suggests that they will take forward the plans laid out in their
earlier published paper Consumer Protection and Representation in an Independent Scotland. In this paper they propose creating an integrated
economic, competition and consumer body.
Income Tax is important
The majority of people
employed will pay income
tax on their earnings. The
revenue from income tax
pays for public services.
INCOME TAX
In a survey conducted between 4 June and 19 June 2013, income tax was identified by 82% of respondents as an important issue for their business. Almost three quarters of respondents also stated that they wanted more information on this issue to help them understand the current policy direction promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Income tax continues to mirror the rest of the UK
2. An independent Scotland establishes its own rate
of income tax
The options available with a ‘no’ vote
1. The setting and collection of income tax
continues to be a reserved issue
2. Further devolution results in the Scottish
Government having responsibility for the setting
and collection of income tax in Scotland
AGCC view of likely end game position
Option 2 – an independent Scotland
establishes its own rate of income tax.
Some further thoughts and information
The Scottish Labour party devolution commission published a report in April 2013 calling for income tax to be devolved to
Scotland. This position has the support of Alistair Darling, Director of the Better Together campaign. The issue has caused
friction within the party as some MPs believe that this extension of powers goes too far. Likewise, the Scottish Conservatives
have also set up a working group to examine possible areas for further devolution.
In February 2013, Scottish Finance Minister John Swinney stated in the media that personal taxation would not increase in an
independent Scotland. However Better Together have argued that the Scottish Government policy on income tax is
unsustainable for the level of public services they have indicated they want to provide.
AGCC view of likely end game position
It is likely income tax will be devolved, although
this depends on the support of the wider
Conservative and Labour parties.
The Policy Direction
The Yes Scotland campaign and Scottish
Government have all stated that independence
will mean Scotland can establish a progressive
taxation regime which addresses inequalities in
Scotland.
The Policy Direction
The Better Together campaign has not made its
views known on the future of income tax in the
event of a No vote. The Scottish Labour party
and Conservatives are currently examining how
devolution could be strengthened in the future.
AUGUST 2013 VERSION 1.2
Scotland’s Future – Briefing Paper 6
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
4 November 2013 - The Scottish Government’s Fiscal Working Group published its Principles for a Modern and Efficient Tax System in an
Independent Scotland. While it makes no recommendations about the levels of personal taxation, including income tax, it acknowledged that
the personal tax system can be used to influence the location decisions of potential workers and their decisions on training and promotion.
26 November 2013 – The Scottish Government’s White Paper Scotland’s Future does not indicate levels of income tax people are likely to pay.
It does, however, suggest that they will seek to simplify the entire tax system. It is not clear how they intend to do this.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
OIL AND GAS REGULATION
A survey run in October 2013 of oil and gas businesses, conducted by EY in association with the Chamber, found that only 10% of the respondents had enough information to form a view on how independence would affect their sector. One of the key issues where both a Yes or No vote may have implications for the industry is in regulation.
The options available with a ‘yes’ vote
Scotland creates its own regulatory body, within
government, with the same functions as the
Department for Energy and Climate Change
(DECC).
Scotland mirrors the proposed new regulatory
body, if it is created, proposed for England.
Scotland sets up its own regulatory system for oil
and gas, separate from government, which
operates in a different way to the one in the UK.
The options available with a ‘no’ vote
Regulatory functions continue to be the
responsibility of the Department for Energy and
Climate Change (DECC).
Regulatory functions, currently the
responsibility of DECC, is moved to an arms-
length body with no additional functions.
Regulatory functions, currently the
responsibility of DECC is moved to an arms-
length body and is given additional functions.
AGCC view of likely end game position
As the Scottish Government has endorsed the
recommendations of the Wood Review, it is
likely they will mirror the changes the UK
Government has confirmed they will implement.
Some further thoughts and information
EY and AGCC research indicated that in the event of a Yes vote, 62% of respondents expect the oil and gas industry to become more
heavily regulated. Meanwhile, 90% thought that there would be no change in the regulatory environment if the result of the referendum
was No.
The Scottish Government has commissioned an industry led Oil and Expert Commission to consider options for the implementation of
the key principles set out in the Scottish Government paper. It has also indicated that Ministers are investigating the transfer of legal and
regulatory oversight of the North Sea to Scotland. This would include setting up an office in Aberdeen.
AGCC view of likely end game position
The recommendations contained in the Wood
Review are implemented. At this stage, it is
unknown how long this will take.
The Policy Direction
In its paper Maximising the Return from Oil and
Gas, the Scottish Government indicates that it
will adopt the current operations of oil and gas
regulation should Scotland become
independent.
The Policy Direction
Sir Ian Wood has recommended in his review
that an arms-length regulator should be
established with additional functions.
November 2013 VERSION 1.3
Updated May 2014
Information updates
18 November 2013 – The Scottish Government’s White Paper Scotland’s Future outlines that an Expert Commission has been established to
consider the appropriate regulatory regime in an independent Scotland. It will publish its recommendations in the spring of 2014.
24 February 2014 – Sir Ian Wood published his final recommendations as to how the maximum economic return could be secured with the
remaining reserves in the UKCS. Both the UK Government and Scottish Government endorsed the findings. The UK Government confirmed it
would begin implementing the recommendations immediately.
16 May 2014 – The UK Government’s Scotland Analysis paper on energy confirms that the new arms-length body will be operational by October
2014. In addition the Maximising Economic Recovery principles will be enshrined in legislation, and subject to parliamentary business could be
in force by spring 2015.
Scotland’s Future – Briefing Paper 7
Oil and Gas Regulation is
important
A strong regulator should
encourage maximisation of
exploration, extraction and
production.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
26 November 2013 – In the Scottish Government White Paper Scotland’s Future it states that accrued rights will be honoured and protected. They
intend to set the basic rate at £160 per week by 2016, which would be higher than the rate in the rest of the UK by the same date. In addition, the
Scottish Government proposes to set up an independent pension commission to advise on any future rises or changes in eligibility.
4 February 2014 – The ICAS paper, Scotland’s Pensions Future highlights that the Scottish Government’s proposal to have a qualifying period of 7-10
years for the state pension could impose constraints on employee mobility between Scotland and the rest of the UK. In addition, affordability of Scottish
Government proposals is also highlighted as a particular challenge given the projected demographics for Scotland.
22 April 2014 – Unpublished papers from the Department for Work and Pensions highlights that the number of Scottish pensioners is expected to rise
from 1 million to 1.3 million over the next 20 years. If Scotland remains part of the UK, Scottish taxpayers would contribute 8% of the total National
Insurance revenue, but get back 8.8% in return.
16 May 2014 – The UK Government’s Scotland Analysis paper on work and pensions suggests that if an independent Scotland does not implement
the proposed increase in the pension age it would cost the Scottish state £6billion between 2026/27 and 2035/36.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
The options available with a ‘yes’ vote
1. The state pension, and the administration of it,
mirrors the rest of the UK.
2. The state pension, and the administration of it,
mirrors the rest of the UK for a transitional period
and changes to the system are made after that
period.
3. Scotland establishes a completely different system
for the administration and payment of the state
pension from the outset of independence.
The options available with a ‘no’ vote
1. Changes to the administration and payments of
the state pension already announced by the UK
Government, are introduced as planned.
2. Changes to the pension system are introduced,
with more changes announced in the coming
years.
AGCC view of likely end game position
For a transitional period, the administration and payment of
the state pension will mirror the rest of the UK, before
changes are introduced in future years.
Some further thoughts and information
In the paper “Pensions in an Independent Scotland,” the Scottish Government states that the single-tier state pension would initially be set at £160 per
week, or £8,320 per annum. This is higher than the new single-tier pension which is due to be implemented by the UK Government in 2016. Nicola
Sturgeon has also indicated that the new Scottish state pension also be uprated by the Triple Lock guarantee, at least for the first term of the independent
Scottish Parliament. The Scottish Government also go on to state that there would be no changes to the delivery of pensions in the event of
independence, as the two existing Pension Centres based in Scotland, which already administers the pensions of people living in Scotland, would
transfer to the responsibility of the Scottish Government.
The UK Government have highlighted that the Scottish Government’s proposals for the state pension have not been costed and the Better Together
campaign has stated that Scotland’s ageing population would make funding a generous state pension very difficult in future years.
AGCC view of likely end game position
The changes already confirmed by the UK Government
are introduced, with further changes to the system
announced in future years.
The Policy Direction
The Scottish Government published its “Pensions in an
Independent Scotland” paper during September 2013. In the
paper, the Scottish Government should have the ability to
have a state pension which is appropriate for the Scottish
population.
The Policy Direction
The UK Government announced in the 2013 Budget that
reform of the pensions system would take place. The
Pensions Bill 2013 is currently going through the
legislative process. The Bill contains a requirement to
review pension rules every five years.
Pensions #1
STATE PENSION By far the largest proportion of the circa £40billion expenditure by the UK Government in Scotland is related to welfare and pension costs (a reserved power). With an ageing population, the provision of adequate state pensions will be under pressure, no matter the result.
October 2013 VERSION1.4
Updated May 2014
Scotland’s Future – Briefing Paper 8
The State Pension is important
Workers contribute to the state
pension through their earnings,
with many workers making
inadequate provision for
retirement.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Pensions #2
OCCUPATIONAL/PRIVATE PENSIONS The future of private and occupation pension schemes is a major concern of Chamber members in this region. If Scotland were to become independent the EU would deem UK pension schemes which Scottish people currently contribute to as a Cross Border Scheme. This would put new requirements on pension funds, which could have an impact on Scottish pension savers.
The options available with a ‘yes’ vote
1. Workers continue to contribute into the existing
schemes they are members of, with no changes.
2. Workers continue to contribute into the existing
schemes they are members of, but schemes are
subject to changes.
3. Workers have to make new arrangements for their
private pensions.
The options available with a ‘no’ vote
1. Workers continue to contribute into the existing
schemes they are members of, with no changes
for the foreseeable future.
2. The UK Government introduces further
changes to the requirements for private
pensions.
AGCC view of likely end game position
Until negotiations take place with the UK Government
and EU about the requirements for cross-border
schemes, the likely end game position is unknown.
Some further thoughts and information
The Yes Scotland website and the Scottish Government paper “Pensions in an Independent Scotland” states that pensions will continue
to be paid in the same way after independence and that any accrued benefits will not be affected by Scotland becoming independent.
However, the Institute of Chartered Accountants in Scotland (ICAS) have highlighted that the Scottish Government plans for personal
pensions would be subject to EU rules which require cross-border pension schemes to be fully funded at all times. They have urged the
UK and Scottish Government to enter into discussions with the EU Commission about any transitional arrangements. Better Together
are also critical about the assumptions made in the Scottish Government paper, arguing that there is no evidence yet that the promises
made can be delivered.
AGCC view of likely end game position
Workers continue to contribute into existing schemes
they are members of, with no changes for the
foreseeable future.
The Policy Direction
The Scottish Government has published its proposals
for the future of pensions in an independent Scotland.
However, the paper makes assumptions which are
based on the outcome of future negotiations.
The Policy Direction
The UK Government are currently rolling out the
requirement for all employers to automatically enrol
employees in a workplace pension scheme. Better
Together have made no comment on the future of
private pensions in the UK.
October 2013 VERSION1.4
Updated April 2014
Information updates
26 November 2013 – The Scottish Government White Paper Scotland’s Future asserts that accrued rights will not be affected by Scotland
becoming independent. The Scottish Government also signals its intention to negotiate with the UK Government on transitional arrangements to
address EU funding rules.
4 February 2014 – The ICAS paper, Scotland’s Pensions Future, states that the proposal to have transitional arrangements over a three year
period is “wholly insufficient for many schemes which are currently funding their deficits over much longer periods.” They ask for the Scottish
Government to clarify what they will do if negotiations are unsuccessful.
28 March 2014 – The European Commission confirmed that it would not change the rules associated with the Directive which requires all cross-
border pension schemes to be fully funded.
24 April 2014 – The Scotland Analysis paper from the UK Government on work and pensions stresses that a significant number of administrative
functionS would need to be created in an independent Scotland to regulate and protect pensions. A new pensions regulator would be required,
along with a Scottish versions of the Pension Protection Fund.
Scotland’s Future – Briefing Paper 9
Pensions are important
Too few workers contribute a
sufficient proportion of their
salary into a private pension in
order to maintain an income
when in retirement.
Immigration is important
Businesses in the North-east rely
on a reliable source of labour. In
order to fill the ongoing skills gap,
businesses rely, to an extent, the
free movement of labour and
recruitment of export staff.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
IMMIGRATION
In a Scottish Chambers survey conducted between 4 June and 19 June, visas and immigration law was identified by 60% of the 159 respondents in Aberdeen and Grampian as an important issue for their business. 48% of respondents also stated that they needed more information on this issue to help them understand the policy direction currently being promoted by the respective campaigns.
The options available with a ‘yes’ vote
1. Scotland mirrors the immigration laws and rules of
the rest of the UK.
2. Scotland mirrors the immigration laws and rules of
the UK for a transitional period, after which it
establishes its own policies in relation to
immigration.
3. Scotland establishes its own immigration policies
and laws from the outset of independence.
The options available with a ‘no’ vote
1. No further changes are made to immigration
rules and legislation.
2. Immigration legislation and rules change,
making it more difficult for immigrants to settle
in the UK
3. Immigration legislation and rules change,
making it easier for immigrants to settle in the
UK.
AGCC view of likely end game position
Scotland will likely pursue different immigration
policies than the rest of the UK, and make it
easier for certain types of immigrants to enter
Scotland.
Some further thoughts and information
While the SNP have been clear that in the event of a Yes vote they anticipate changes in immigration policy to make it easier for
immigrants to come to Scotland, as yet, neither the Yes campaign or Scottish Government have outlined what their policy
positions would be in relation to issues including citizenship and the criteria to secure permissions for leave to remain. In addition,
they have not outlined what agency would have responsibility for monitoring immigration and border control.
It should also be pointed out that much of Scotland’s new immigration policies will depend on whether it is a member of the EU
come independence.
AGCC view of likely end game position
Specific policies could be different, depending
on which party wins the next general election. As
such, the likely end game result for immigration
policy is unknown.
The Policy Direction
The SNP has, in the past, called for Scotland to
have specific immigration rules to address
Scotland’s labour needs and requirements.
The Policy Direction
Immigration is a highly politicised issue at
Westminster, and it is likely there will be further
tightening of immigration rules and legislation.
October 2013 VERSION 1.3 Updated May 2014
Information updates
28 November 2013 – The Scottish Government’s White Paper Scotland’s Future outlines some of the policy positions they will take should
Scotland become independent. They indicate they will introduce a points-based system targeted at addressing the needs of Scottish society.
They also state they will lower current financial thresholds and salary requirements for entry and re-introduce the post-study work visa.
16 May 2014 – The UK Government’s Scotland Analysis paper on immigration states that an independent Scotland would have the option of
joining the Schengen area if it joined the EU, or the Common Travel Area which operates between the UK and the Republic of Ireland, but not
both. Membership of the Common Travel Area would require cooperation from the Scottish Government on certain aspects of visa and immigration
policies.
Scotland’s Future – Briefing Paper 10
Defence is important One of the main
responsibilities of any
government is the security of
their country and the
protection of its people,
territory, economy and
interests.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
DEFENCE
Defence is a policy area which has been subject to significant reform over the last 3 years. By 2015, the UK will spend £23.9billion on defence. A significant proportion of defence employees and resources are based in Scotland. This includes the nuclear Trident programme, which the SNP have stated they would remove from Scotland should it become independent.
The options available with a ‘yes’ vote
1. Scotland establishes its own armed forces, using
facilities and people previously controlled by UK
forces
2. Scotland establishes its own armed forces, but is
required to establish new facilities and recruit new
staff.
3. Scotland enters into an agreement with the UK to
share armed forces and their resources.
4. Scotland enters into an agreement to contribute
forces to a wider defence organisation.
The options available with a ‘no’ vote
1. Changes currently being implemented by UK
Government will continue, with no further
changes beyond 2020.
2. Changes currently being implemented by UK
Government will continue, with further reforms
initiated beyond 2020.
3. UK forces eventually join a coordinated EU
defence force.
AGCC view of likely end game position
Not enough is known at the point to come to a
view on the likely end game position.
Some further thoughts and information
The UK Government in its Scotland Analysis paper on defence acknowledges that negotiations would have to take place over
the defence resources currently based in Scotland, and over defence staff who are Scottish. However, it highlights that these
would be very difficult issues to resolve and that an independent Scotland could not simply co-opt existing armed force units
based in Scotland or move Scottish staff into a new Scottish force. The paper also highlights that European states with similar
sized populations to Scotland do not have their own armed forces and instead make contributions to EU and/or NATO defence
arrangements.
AGCC view of likely end game position
It is likely further reform will take place beyond
2020.
The Policy Direction
Aside from stating that an independent would
have a defence budget of £2.5billion and would
remove Trident, there has been no comment
on what a Scottish defence force would look
like.
The Policy Direction
The UK Government of the time are required to
review defence forces every 5 years in order to
ensure the defence force is fit for purpose.
Defence spending has been reduced yearly
since 2010.
October 2013 VERSION 1.2
Information updates
13 November 2013 – The Scottish Global Forum, a think-tank closely aligned with the Yes campaign, published a breakdown
of what the £2.5 billion budget would fund in a Scottish defence force. According to their research, the budget would fund four
frigates, 15 fast jets and 9000 soldiers. This would make the force of similar size to Denmark.
26 November 2013 – The white paper ‘Scotland’s Future’, published by the Scottish Government anticipates that Scotland will
inherit a share of the UK’s defence assets. The paper also indicates that the Scottish Government intends to progressively bu ild
up a force of 15,000 regular personnel over the 10 years following independence. In addition, the Scottish Government restates
its commitment to remove Trident from the Faslane base and instead use Faslane as the headquarters of the Scottish defence
force
Scotland’s Future – Briefing Paper 11
October 2013 VERSION 1.1
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
MEMBERSHIP OF NATO
NATO (North Atlantic Treaty Organisation) is a defence alliance made up of 28 countries, which has the central purpose of safeguarding the freedom and security of members through diplomatic and military action. It is open to any North Atlantic state to join, as long as they fulfil the entry criteria. Membership of NATO is a proposed cornerstone of an independent Scottish state but this is not clear cut given the importance placed on nuclear deterrent by NATO.
The options available with a ‘yes’ vote
1. Scotland assumes NATO membership
automatically upon independence.
2. Scotland has to apply for NATO membership, and
after negotiation is accepted as a member.
3. Scotland has to apply for NATO membership and
after negotiation is refused membership.
4. Scotland does not join NATO.
The options available with a ‘no’ vote
1. The UK continues with NATO membership.
2. The UK leaves NATO.
AGCC view of likely end game position
Scotland will have to apply to become a
member of NATO. Admittance is not
guaranteed given its stance on nuclear
deterrents.
Some further thoughts and information
NATO is believed to have confirmed to Scottish Government officials that an independent Scotland would be required to apply
for NATO membership. It is also NATO policy that countries wishing to join the alliance are not permitted to do so whilst in an
existing military or territorial dispute with an existing member state. The negotiation process would take around three years and
involve negotiations around the retention of nuclear weapons in Scotland, which the SNP have pledged to remove from
Scotland.
AGCC view of likely end game position
The UK continues as a NATO member.
The Policy Direction
At its 2012 conference, the SNP approved a
motion supporting continued membership of
NATO, albeit on the condition that membership
would not require the retention of nuclear
weapons in Scotland.
The Policy Direction
There has been no indication from UK political
parties of any intention to remove the UK from
NATO.
Information updates
18 November 2013 – The Scottish Government’s white paper ‘Scotland’s Future’ states that it is in Scotland’s interests to remain a member of
NATO. It recognises that while membership will be subject to discussion and agreement by other members, it is in the interests of Scotland and
other countries to secure an interim membership through negotiations taking place in the period between a Yes vote and independence.
Scotland’s Future – Briefing Paper 12
NATO is important NATO regards the UK Trident
programme as a strategic element of
its nuclear defence policy. The Trident
programme is currently based in
Scotland on the Clyde.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
OIL & GAS TAXATION
Research conducted as part of AGCC’s Oil and Gas Survey has shown that an increasing number of oil and gas companies are taking the independence referendum into consideration in the future plans and investment proposals. The research has also shown that stability (or instability) in the UK fiscal regime has a knock on effect on confidence and activity levels in the UKCS. Rising confidence, activity and investment in the industry over the last two years has been attributed, in part, to progressive changes to tax allowances.
The options available with a ‘yes’ vote
1. Scotland mirrors the fiscal system used for the oil
and gas in the rest of the UK.
2. Scotland mirrors part of the taxation system used
in the rest of the UK for the oil and gas industry,
and amends other taxes.
3. Scotland establishes a different fiscal regime for
the oil and gas sector.
The options available with a ‘no’ vote
1. UK Government makes further changes to the
fiscal regime for oil and gas beyond 2015.
2. UK Government makes no changes to the fiscal
regime for oil and gas beyond 2015.
3. Oil and gas taxation becomes a devolved
power.
AGCC view of likely end game position
Scotland mirrors the majority of oil and gas taxes
in the UK.
Some further thoughts and information
In its recent paper Maximising the Return from Oil and Gas the Scottish Government states that it will adopt a presumption in
favour of existing aspects of the North Sea fiscal regime, as it is currently administered, to support stability in the industry. The
paper also commits to undertake consultation with the industry before it implements any changes to the fiscal regime in the future.
In October 2013 the UK Government introduced the first decommissioning relief deeds which guarantees the decommissioning
tax relief a company will receive.
AGCC view of likely end game position
The UK will make further changes to the fiscal
regime for oil and gas, in consultation with the
fiscal forum.
The Policy Direction
The Scottish Government published its paper
Maximising the Return from Oil and Gas in the
July 2013. In the paper it committed to
implement existing aspects of the fiscal regime
to support stability.
The Policy Direction
The UK Government has established a fiscal
forum and in its recent Oil and Gas Strategy
committed to undertaking collaborative work
with the forum in the future when making
decisions on the fiscal regime.
November 2013 VERSION 1.2 Updated May 2014
Information updates
18 November 2013 – The Scottish Government’s White Paper Scotland’s Future indicates that they will simplify the business tax regime, but do
not state how they will do this. However, the papers also states that they have no intention to increase the tax burden on the oil and gas industry,
and any changes to the fiscal regime will be subject to consultation.
16 May 2014 – In the UK Government’s Scotland Analysis paper on energy the UK Government confirms that it will review the UK fiscal regime
for oil and gas, in line with the recommendations in the Wood Review. The reviews findings will be reported at the 2015 Budget statement.
Scotland’s Future – Briefing Paper 13
Oil and gas taxation is important
Revenues from oil and gas
companies contribute 15% to the
UK’s total corporation tax take. The
industry relies on a stable fiscal
regime to plan for future activity.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
SOVEREIGN WEALTH FUND
Sovereign Wealth Funds are pools of money derived from a country's reserves, which are then set aside for investment purposes that will benefit the country's economy and citizens. Of the 20 major oil producers in the world, the majority operate some form of national sovereign wealth fund. A recent survey conducted by EY, in association with the Chamber, showed that 60% of respondents supported the creation of some form of fund.
The options available with a ‘yes’ vote
1. A short term stabilisation fund and long term
savings fund is established upon independence.
2. A short term stabilisation fund is established upon
independence.
3. A long term savings fund is established upon
independence.
4. No wealth fund is created.
The options available with a ‘no’ vote
1. Status quo
2. The UK sets up some form of wealth fund.
AGCC view of likely end game position
Some form of wealth fund is created using oil
and gas revenues. However, it is not known
what institution would take control of such a fund
if Scotland were in a currency union with the rest
of the UK.
Some further thoughts and information
The Fiscal Commission Working Group, which was tasked by the Scottish Government to come up with a proposed wealth fund
model, published their paper Stabilisation and Savings Fund for Scotland in October 2013. In the paper they propose setting up
a stabilisation fund where excess oil revenues can be placed, and an investment fund where money could be placed provided
Scotland was running a manageable deficit. This view was supported by the Centre for Public Policy for the Regions.
However, confidential papers written by Scottish Government advisors obtained by the Better Together campaign through
Freedom of Information requests stated that “it would have had to reduce public spending, increase taxation of increase public
sector borrowing” if a wealth fund had been established in the past 20 years. The advice goes on to state “there would be
comparatively few opportunities to invest in an oil fund in future years.”
AGCC view of likely end game position
It is unlikely that the UK will introduce a wealth
fund.
The Policy Direction
The creation of some form of wealth fund, using
oil and gas revenues, has always been a key
policy objective of the SNP.
The Policy Direction
There has been no indication that a future UK
Government would seek to create a wealth fund
using oil and gas revenues.
November 2013 VERSION 1.4 Updated May 2014
Information updates
26 November 2013 – The Scottish Government’s White Paper Scotland’s Future restates their commitment to establish both a stabilisation fund
to manage year on year changes in oil and gas revenue, and a long-term savings fund to invest a proportion of wealth generated from oil and
gas production in financial assets.
24 February 2014 – UK Energy Minister, Ed Davey, appeared to rule out the possibility of the UK Government setting up a fund in the future.
16 May 2014 – The UK Government’s Scotland Analysis paper on energy suggests that; “In the event of independence Scotland would be
exposed to a narrower tax revenue base and more volatile fiscal position.” Thus making it more difficult to sustain a fund without public spending
cuts.
Scotland’s Future – Briefing Paper 14
A Sovereign Wealth Fund is
important
The SNP want to use the
revenues from oil and gas to
maintain levels of public spending
in the future.
Financial Regulation is
important Businesses rely on rigorous but
fair financial regulation to
encourage stability in financial
markets. It has an impact on
lending, exchange rates and
business confidence.
FINANCIAL REGULATION
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, financial regulation was identified by 79% of AGCC’s 159 respondents as an important issue for their business. 53% of respondents also stated that they wanted more information on this issue to help them understand the policy directions of the respective campaigns.
The options available with a ‘yes’ vote
1. Scotland takes full control of financial regulation,
and sets up its own regulatory body/bodies, with
responsibility for every aspect of financial
regulation, including macroeconomic policy.
2. Scotland sets up its own regulatory body with the
responsibility of monitoring financial conduct, but
macroeconomic policy is determined by the Bank
of England.
The options available with a ‘no’ vote
1. The current system for financial regulation
continues, with no changes in the future.
2. Elements of the financial regulatory
environment are reformed.
3. The financial regulatory environment
undergoes total reform in the future.
AGCC view of likely end game position
If, as we expect, Scotland retains Sterling then it
is likely the Scottish Government will take
responsibility for financial regulation, with the
Bank of England retaining control of monetary
policy.
Some further thoughts and information
The regulatory environment for the UK currently has two organisations responsible for financial conduct; the Financial Conduct
Authority and the Prudential Regulation Authority (which is part of the Bank of England). The Bank of England sets monetary policy.
The Scottish Government’s White Paper Scotland’s Future sets out the Scottish Government’s preferred policy option upon
independence. They restate their position that it is in Scotland’s best interests to retain Sterling and therefore monetary policy should
be set according to economic conditions across the Sterling area with ownership and governance from the Bank of England,
undertaken on a shareholder basis. In relation to the conduct of financial institutions, the Scottish Government states it will establish
its own regulator.
AGCC view of likely end game position
It appears likely there will be further reform of the
financial regulatory environment in further years.
The Policy Direction
In February 2013 2013, the Scottish Government
appointed Fiscal Commission recommended that
the Scottish Government take responsibility for
financial regulation, which would include setting up
a financial conduct regulator, and that the Bank of
England retain responsibility for monetary policy.
The Policy Direction
The Banking Reform Bill is currently going through
the legislative process at Westminster. This
includes further reform which will force banks to
separate their retail and investment activities.
January 2014 VERSION 1.1
Scotland’s Future – Briefing Paper 15
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
27 February 2014 – Standard Life in its annual report indicated that it was developing contingency plans in the event Scotland becomes independent.
Amongst the material issues which led to the decision to develop contingency plans was the uncertainty about the future arrangements for financial
regulation in an independent Scotland.
Business rates are
important
Business rates are a property-
based tax levied on businesses
before they even make a profit.
The Chamber has campaigned
for reform of business rates.
BUSINESS RATES
In a Scottish Chambers survey conducted between 4 June and 19 June 2013, business taxes were identified by 85% of AGCC’s 159 respondents as an important issue for their business. Business rates is a commercial property tax levied on businesses and was noted as the most burdensome cost on retail businesses in a North-east Retail Survey conducted by the Chamber in 2013.
The options available with a ‘yes’ vote
1. Scotland continues with the current rates system,
mirroring rate changes in the rest of the UK.
2. Scotland continues with the current rates system,
but no longer mirrors rate changes with the rest of
the UK.
3. Scotland reforms the business rates system,
removing its linkage to commercial property values.
The options available with a ‘no’ vote
1. The business rates system continues in its
current form, with Scotland mirroring rate
changes in the rest of the UK.
2. The business rates system in the rest of the UK
is reformed, and Scotland continues with the
current system.
3. Both business rates systems in the UK and
Scotland, are reformed.
AGCC view of likely end game position
Scotland continues with the current rates
system, mirroring rate changes in the rest
of the UK.
Some further thoughts and information
In the Scottish Government’s White Paper Scotland’s Future they commit to maintaining the Small Business Bonus and
maintaining business rates parity with the rest of the UK. Following on from an initial consultation on business rates at the
beginning of 2013, the Scottish Government has also brought forward proposals to consult on the reintroduction of transitional
relief in 2017, introduce powers for local authorities to create their own relief schemes and
The Chancellor announced a 2% cap on business rate increases for 2014/15 at the 2013 Autumn Statement, which was matched
by the Scottish Government.
AGCC view of likely end game position
The business rates system continues in its
current form, with Scotland mirroring rate
changes in the rest of the UK.
The Policy Direction
The Scottish Government has committed to
undertake a thorough and comprehensive
review of the business rates system
between 2013 and 2017. The initial
consultation ruled out the prospect
removing its link to commercial property
values.
The Policy Direction
To date there has been no indication for
any of the political parties that they wish to
fully reform business rates. However, there
is an increasing lobby on this issue from
business organisations.
January 2014 VERSION 1.0
Scotland’s Future – Briefing Paper 16
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
Information updates
Territorial Waters are
important
The location of territorial
waters will have an impact
on the jurisdiction of oil and
gas operations and other
marine activity such as
fishing.
This is a working document and will be updated as more information becomes available, see latest version at www.agcc.co.uk/policy1/#scotland-s-future
TERRITORIAL WATERS
A survey published by EY, conducted in partnership with the Chamber showed that 90% of the oil and gas companies
who responded wanted more information on how independence might affect their business. As the debate has
progressed, one of the most contentious issues has been over the oil and gas industry and the potential revenues that
could be generated if Scotland become independent. However, revenue predictions have been based on the territorial
waters boundary being in a certain location.
The options available with a ‘yes’ vote
1. The Scottish territorial waters boundary is not
changes.
2. The Scottish territorial waters boundary is amended.
The options available with a ‘no’ vote
1. The boundary of UK territorial waters remains the
same.
AGCC view of likely end game position
To date, the UK Government has not indicated
whether it will seek a review of territorial waters
if Scotland becomes independent. As such, we
assume that current territorial waters will remain
the same.
Some further thoughts and information
The SNP have claimed that following independence, 90% of North Sea oil and gas would be in Scottish waters. Under current
UK legislation, Scotland and England’s territorial waters are divided in a way which supports that statement.
However, territorial waters between different countries are set under the United Nations Convention on the Law of the Sea III.
Under the convention, it could be debated that because the Scottish border extends on a North-eastern trajectory at Berwick,
Scotland’s territorial waters could be amended to reflect the land border. To date, the UK Government has not indicated whether
they would look to amend the territorial waters.
AGCC view of likely end game position
The boundary of UK territorial waters remains
the same.
The Policy Direction
It appears that Yes Scotland and the SNP do not
expect Scottish territorial waters to be amended.
The Policy Direction
Territorial waters are determined under UN law,
therefore is it unlikely that the current
boundaries will be amended.
January 2014 VERSION 1.0
Information updates
Scotland’s Future – Briefing Paper 17
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